Prabhu ‘unlikely’ to hike fares in upcoming rail budget

New Delhi: Railway minister Suresh Prabhu not likely to bite the bullet on hiking fares significantly to help run the cash-strapped Railways.

Railway Minister Suresh Prabhu will present the Rail Budget today.

The Rail Budget, is expected to lean more heavily on support from the finance ministry and borrowings to bridge the resource gap.

According to sources, it would not be politically expedient to go in for a significant hike in fares at this juncture as four states are headed for the elections.

Prabhu admitted in the Lok Sabha on Wednesday that the resources of the Railways are constantly dwindling as freight and passenger fares are not being decided in an optimum manner.

He said that the share of the Railways in freight as compared to other modes of transportation is declining.
There has been a steady increase in freight rates over the years to cross-subsidise losses incurred in running passenger trains, which has driven freight to the road sector.

The cross-subsidy from freight to passenger operation has crossed Rs 30,000 crore this year while the Seventh Pay Commission burden is about Rs 32,000 crore. The Railways earned Rs 136,079.26 crore as against the target of Rs 141,416.05 crore during the April-January period, a decline of 3.77 per cent.

There has been a slump in passenger and freight revenues this year, which is straining the finances of the Railways.

According to senior officials, stiff competition from airlines for wealthier travellers, whose higher fares are a major source of revenue, had hurt the Railways’ earnings along with a fall in demand for major goods like coal and cement.

Union finance minister Arun Jaitley cut the Rs 40,000 crore of cash promised to the Railways in his last Budget by a fifth after they failed to spend money on time. The Railways still expects about Rs 50,000 crore in support for projects in 2016-17.

Aiming at shifting goods from road to rail, the Budget is expected to offer various schemes to attract loadings. A scheme for premium high-speed parcel trains is slated to be unveiled in the Budget.

In the suburban section, the Rail Budget will announce introduction of AC suburban trains in Mumbai, which will be replicated in other areas as well. The fare for the AC suburban service will be higher than regular local trains.

Introduction of the dual mode engine to enable the train to run both on diesel and electricity is likely to be announced in the budget.

The Railways has already decided to run as many special trains on higher fares on popular routes catering to the growing demand during festive season, an indirect way of hiking fares.

Prabhu will give details about concerted efforts being undertaken by the Railways to keep stations and trains clean and environment-friendly in his second Budget speech.

The 400 stations being planned to be developed with private participation are likely to be announced as green stations with several environment-friendly measures like generation of solar energy, recycling of water, conversion of waste to energy and use of LED lights to be incorporated in the plan.